Wednesday, July 26, 2006

Alcatel Post Q2 Revenue of EUR 3.4 Billion, up 7.6%

Alcatel reported Q2 revenue of EUR 3,384 million, up 7.6% year-over-year. Operating profit was EUR 263 million, a 7.8% operating margin
and net income (group share) was EUR 180 million, representing earnings per share or EUR 0.13.



Some highlights:

  • During Q2, Alcatel shipped a record 6.7 million DSL lines


  • Q2 gross margin was 33.6%, down from 35.6% a year earlier.


  • The IP data business once again recorded significant growth, with new contract wins in the U.S., Denmark, Spain, Venezuela, Malaysia and Thailand. In addition to the strong momentum in IP service routing, the MSWAN activity continued to reflect sustained demand for ATM-based DSL aggregation and for 3G RAN (Radio Access Network) aggregation.


  • Revenues grew significantly in the NGN/IMS activity, more than doubling in the first half of the year compared to 2005, with good traction at incumbent operators in Europe and Asia. The business now has more than 90 customers.


  • A major win in the Enterprise fixed mobile convergence was awarded this quarter with a tier-1 operator in the UK.


  • The traditional TDM voice activity continued to decline as expected during the quarter, however, some of this decrease was offset by maintenance/services revenue, which now accounts for a significant portion of the business.



































































































Segment Breakdown

Second Qtr



Second Qtr



First Qtr

In EUR million

2006



2005



2006

Revenues
Fixed Communications

1,363



1,224



1,273

Mobile Communications

1,007



958



908

Private Communications

1,034



981



905

Other & Eliminations

(20)



(18)



(19)

Total

3,384



3,145



3,067

Income from Operations
Fixed Communications

133



120



110

Mobile Communications

80



115



57

Private Communications

51



59



48

Other & Eliminations

(1)



(31)



(17)

Total

263



263



198





"While preparing for the merger with Lucent Technologies and the Thales transaction, Alcatel achieved good revenue growth in the second quarter, above market rate. Our strong performance in the wireline segment confirmed Alcatel's leading position in the network transformation to an all-IP infrastructure to support triple play services. We are particularly pleased with the resulting 4-fold year over year revenue increase in IP routing and aggregation as well as our strong position in the DSL and fiber access markets."http://www.alcatel.com

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